The Kolkata Bench of Customs,Excise and Service Tax Appellate Tribunal(CESTAT) ordered the payment of interest under Section 11BB of the Central Excise Act ,1944 to Hindustan Paper Corporation Limited (HPCL) on a delayed refund claim post-provisional assessment.
Hindustan Paper Corporation Limited,appellant-assessee,had cleared goods on a provisional assessment basis. After finalizing the provisional assessments for the period from September 1998 to March 2005, it was found that the assessee had paid Rs. 2,37,28,797/- excess Excise Duty. The assessee then filed a refund claim for this amount, which was rejected by the Order-in-Original (OIO) dated 2nd March 2010.
The assessee appealed the decision, and the Commissioner (Appeals) ruled in their favor on 30th November 2011. The Commissioner concluded that the discount given through credit notes did not pass on the duty to the buyers, and there was no evidence to contradict the assessee’s claim. The refund of Rs. 2,37,28,797/- was thus deemed payable to the assessee, along with applicable interest.
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The Revenue’s Review Appeal was dismissed, and the assessee’s claim was upheld. The Adjudicating Authority(AA) later sanctioned the refund on 7th May 2012. However, the assessee’s claim for interest of Rs. 94,24,844/- was rejected by the AA on 26th March 2013, and the Commissioner (Appeals) upheld this rejection. The assessee has now appealed to the tribunal regarding the interest claim.
The two member bench comprising R. Muralidhar (Judicial Member) and Rajeev Tandon(Technical Member) noted that the assessments for 2004, 2005, and 2006 had confirmed excess excise duty of Rs. 2.37 crore was paid. These assessments were not challenged by the department and had attained finality.
The refund claim filed by the assessee was initially rejected in 2010. However, the Commissioner (Appeals), in an order dated 30 November 2011, held that the refund was valid and directed that it be paid with interest under Section 11BB. This order was accepted by the department, and no further appeal was filed.
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Despite this, the lower authorities later denied interest, citing delays from the assessee’s side. The tribunal found this unacceptable since the earlier order had become final and should have been followed.
The CESTAT set aside the later order and allowed the appeal, holding that the assessee was entitled to interest as directed earlier.
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